Google was asked to pay $15.8 million of that amount. Yet plaintiffs were also seeking ongoing royalties, which the court has now awarded. Google was contesting the royalty and the company will likely now appeal the calculation, which is potentially massive.

The math is confusing. However, as Ars Technia reports, the royalty amounts to just over 1.35 percent of US AdWords revenue, between 2012 to 2016 when the patents in question (6,314,420 and 6,775,664) will expire. In the court’s order (embedded below) the royalty figure is presented as 6.5 percent. But it’s 6.5 percent of 20.9 percent “royalty base” apparently.

Doing some simple math, Google could be compelled to pay between $800 million and $1 billion for the four-year period based on the approved royalty formula. Vringo’s attorneys originally wanted nearly $700 million in damages from the defendants collectively. They will obtain more than that from Google alone if the royalty determination stands.

The “420″ and “664″ patents involved the ranking and placement of ads in search results. They were filed in 1996 and owned for a considerable length of time by Lycos, which later sold them to Vringo.

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About The Author

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.

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CaptainKevin

Google has a responsibility to make sure the technology they are using is not violating the intellectual property rights of others. While this will not please Google shareholders, it may help to change a culture that has thus far sought to monetize the work of those who innovate and those that create (ordinary webmasters).

http://www.nathanielbailey.co.uk/ Nathaniel Bailey

Sorry off topic, but I love how you only nofollowed the two google text links ;)

Back on topic, why on earth wouldn’t such a large company that everyone is always watching simply pay to use patents in the first place? Is someone going to lose their job over this, or is google simple going to shrug it off!?

Chris Angus

This brings some hope that we’ll see ‘the beginning of the end’ for patent trolls. A $1bn payout from Google will hopefully smart enough to get Google to do something about this terrible problem, which plagues the tech community. Patents and trolls stifle innovation and penalise creative entrepreneurs with evil ‘patent troll tax’ as their generic ‘catch all patents’ attempt to snare some free money with their shotgun parasitic tactics.

Richard Krupski

Here’s an idea, if you want to buy or acquire a patent, you have to actually USE it within a period of time, or relinquish it. An idea, ANY idea, is not something anyone can own outright, a patent only offers you exclusivity for a period of time, so you can own the patent, but you cannot own the idea.

So it follows, if you are not using your exclusive right to use the patent, you should be forced to release it, allowing someone else exclusivity to it, and this would provide some much needed incentive to businesses acquiring patents to actually use them and contribute to society instead of living off it like a parasite.

If you don’t want to innovate or create, you have no right to a patent.